KUNDAN SINGH COSTRUCTION LTD VS T NATIONAL ROADS AGENCY MISC

IN THE HIGH COURT OF TANZANIA COMMERCIAL DIVISION AT DAR ES SALAAM MICELLANEOUS CIVIL CAUSE N O .ll OF 2012 In the Matter of Arbitration conducted in the Stockholm Chamber of Commerce in Arbitration V.09/2009 BETWEEN Kundan Singh Construction Limited as "Claimant and Tanzania National Roads Agency as "Respondent" AND In the Matter of an intended Petition to challenge the Final Award granted by Stockholm Chamber of Commerce in favour of the Respondent in the Counter-Claim BY KUNDAN SINGH CONSTRUCTION LTD......................... PETITIONER AND TANZANIA NATIONAL ROADS AGENCY....................RESPONDENT Date of last Order: 03/07/2012 Date of Ruling: 07/09/2012 RULING MAKARAMBA, J.: This is a ruling on preliminary objection the Respondent raised against the Petitioner on the following points of law:- Page 1 of 13 (a) The petition is not properly before the Court as it was presented before the award from which the petition arise was filed in Court as required by law and will ask the Court to strike it out from its record. (b) The petition is incompetent in that Article 40 o f Stockholm Chamber o f Commerce Arbitration Rules applicable to the Arbitration proceedings makes it dear that the arbitral award shall be final and binding upon parties. The petition, the subject of the present objection has been preferred under section 15 and 16 of the Arbitration Act [Cap.15 R.E 2002], Rule 6, 7 and 8 of the Arbitration Rules, GN No.427 of 1957 and "any other enabling provisions o f law.” In arguing the preliminary objection, Mr. KILINDU represented the Petitioner and MR. KOMBA represented the Respondent. The preliminary objection by consent of the learned Counsel for the parties was disposed of by way of written submissions. Mr. Komba flagged his submissions by arguing that by virtue of section 16 of the Arbitration Act, Cap.15 R.E. 2002, the Court has powers to set aside an award where an arbitrator or umpire has misconducted himself, or an arbitrator or award has been improperly procured. The power of the Court under section 16 of the Arbitration Act is exercisable subject to section 12(2) of the Arbitration Act Cap.15 R.E. 2002 of the laws of Tanzania read together with Rules under G.N. No.427 of 1957, which Page 2 of 13 require the Arbitrator upon being requested by the parties to file an award in Court, Mr. Komba further submitted Rule 4 of the Arbitration Rules makes it lucid the necessity of filing in Court the Arbitral Award before an aggrieved party decides to challenge the same, Mr. Komba pointed out. Upon filing the award in Court, the party aggrieved by it has the right to challenge its registration as a decree of Court, Mr. Komba added and referred this Court to the decision in Miscellaneous Civil Cause No.35 of 1992 between TANZANIA HARBOURS AUTHORITY VERSUS MVITA CONSTRUCTION CO, LTD (Unreported) where the Court observed that:- "I do not know how the position in England, but under the Arbitration Ordinance Cap. 15, there is a procedural scheme for various steps to be taken by the parties up to the stage setting aside. According to the scheme arbitrator first make and signs an award and then give notice to the parties "of the making and signing thereof, and o f the amount o f the fees and charges payable to the arbitrator or umpire in respect o f Arbitration award" (s. 11(1) Then, a t the request o f any o f the parties, and upon payment o f the fees and charges due in respect o f the Arbitration and award and o f the costs and charges o f filing the award, the arbitrator causes the award, or a signed copy o f it, to be filed in the Court; and notice shall be given to the parties by the Arbitrator" (s. 11 (2). It is after that setting aside provisions follow s. 15. In my view therefore, time for setting aside an Arbitration award, which I agree Page 3 of 13 to be 30 days, starts to run from the time when an award is filed in the Court by the Arbitrator and when the parties are notified o f the filing" (the emphasis is o f this Court). Mr. Komba also cited to this Court the case of REGIONAL MANAGER TANROADS KAGERA VERSUS RUAHA CONCRETE COMPANY LIMITED, Misc. Commercial Cause No. 18 of 2006, High Court Commercial Division (Unreported) where the Court ruled that:- "After hearing the learned Counsel and referring to the provisions o f the law cited by Mr. Lukwaro and upon going through the pleadings, I am convinced that the petitioner was well aware o f what the law required him to do before filing the petition. But even by sheer force o f logic this Court cannot be asked to set aside an award which is not properly filed in terms o f provisions o f the Arbitration Act." Amplfying on TANROADS's (supra), Mr. Komba submitted that, in that case, the petition was lodged before an award had been filed in Court. The Court struck out the petition for being incompetent for having been improperly filed. Mr. Komba further added that, an arbitral award is only capable of being challenged by an aggrieved party after the arbitrator or someone on his behalf has filed it in court and notified the parties of its filing. Even the time to file a petition to challenge an arbitral award starts to run the date the party receive the notice of filing an award Mr. Komba further submitted and referred this Court to the decision in Civil Appeal Page 4 of 13 No. 60 of 1998 between TANZANIA COTTON MARKETING BOARD AND COGECOT COTTON COMPANY S.A at page 3 which states that: "the Court in computing period o f challenging the Arbitration Award, made it dear that, the time start to run from the date the party receive the notice o f filing the award." Mr. Komba also referred this Court to the decision in Misc. Civil Application No.8 of 2011 between LEGAL AND HUMAN RIGHTS CENTRE (LHRC), LAWYERS ENVIRONMENT ACTION TEAM (LEAT), SI KI KA COMPANY LTD, TIMOTHY ALVIN KAHOHO VERSUS DOWANS TANZANIA LTD (TANZANIA), DOWANS HOLDING SA (SCL), TANZANIA ELECTRIC SUPPLY LIMITED where at page 11 it is clearly pointed out that the petition to block the registration of an award as decree in terms of section 17 of the Arbitration Act was made after the ICC's final award had already been filed in the Court. Mr. Komba prayed that this Court upholds the first point of preliminary objection and strike out the petition with costs. In response, Mr. Kilindu, learned Counsel for the Petitioner argued that, the proper law to be followed while filing petitions under the Arbitration Act Cap. 15 R.E 2002 is Rule 8 of the Arbitration Rules GN 427 of 1957, which reads as follows: Page 5 of 13 "Every Petition shall have annexed to it the submission, the award or the special case, to which the petition relates, or a copy o f it certified by the Petitioner or his advocate to be a true copy". In support of his argument Mr. Kilindu preferred this Court to the decision in Misc. Civil Application No.8 o f 2011 betw een LEG AL A N D HU M AN R IG H TS CEN TR E (LH RC), LA W YER S EN V IR O N M EN T A C TIO N TEAM (LEAT), SI KI KA C O M P A N Y LTD, T IM O T H Y ALVIN KAH O H O V E R S U S D O W A N S TA N Z A N IA LTD (TA N ZA N IA ), D O W A N S H O LD IN G SA (SCL), T A N Z A N IA ELECTRIC SU P P LY LIM ITED (supra) where at page 41 it was held that: "In his 4 h preliminary objection, Mr. Fungamtama claimed that both the Joint Petition by the 1st, 2 ld and S d Petitioners/interested Parties, and the Petition o f the 4 h Petitioner/Interested Party, Mr. Kahoho, are bad in law for non-compliance with the mandatory requirements provided by Rule 8 o f the Arbitration Rule Cap. 15, Subsidiary Legislation. This Rule, as we know, provides the procedure in which petitions seeking any kind o f relief should be presented before the Court." Mr. Kilindu submitted further that, a certified copy of the award by the Petitioner or his advocate annexed in his petition is sufficient to initiate the petition. Mr. Kilindu submitted further that, there is no time limit within which a party to arbitration proceedings can request an Arbitrator to file an Page 6 of 13 Award in Court after the Arbitrator has issued an award. The time to file a petition to set aside an award therefore starts to run from the day the Award is collected and not from the day the Award is filed in Court by the Arbitrator. To support his argument, Mr. Kilindu preferred this Court to the decision in Misc. Civil Cause No.134 of 2006 EAST AFRICAN DEV. BANK VERSUS BLUE LINE ENTERPRISES LTD in which Professor Fimbo, Advocate argued that the period of limitation started to run from 31/08/2005 when the award was ready for collection, so when the petition was filed on 15th September 2006 it was out of time by more than ten month. The finding of the Court under paragraph 10 was that: "I am satisfied and hold so, that the petition filed is time-barred. The preliminary objection is therefore upheld and the petition is dismissed with costs. Mr. Kilindu submitted further that, the decision in Misc. Civil Cause No.35 of 1992 between TANZANIA HARBOURS AUTHORITY AND MVITA CONSTRUCTION CO. LTD was decided per incurium since it is inconsistent with a statutory provision, that is, Rule 8 of the Arbitration Rules. Mr. Kilindu also made reference to Uganda by citing section 34 of the Arbitration and Conciliation Act of Uganda which provides that, "the time to file an application to set aside an arbitral award starts to run from the time the arbitral award is received." Cementing his argument, Mr. Kilindu cited to this Court the case of ATTORNEY GENERAL VERSUS KILEMBE Page 7 of 13 MINES LTD AND ANOTHER (2011) 1 E .A .ll at page 15 where it was held that: '>4/7 application for setting aside the arbitral award may not be made after one month has elapsed from the date on which the party making that application had received the arbitral award, or if a request had been made under section 33 from the date on which that request had been disposed o f by the arbitral award." Mr. Kilindu prayed that, the first ground of the Respondent's preliminary objection is completely devoid of any merit and should therefore be dismissed with costs. In his rejoinder Mr. Komba submitted that, in the present suit, the governing provision under the Arbitration Act is Rule 5 which provides that; " all application under the arbitration Act shall be by way o f petition." Rule 8 of the Arbitration Rules only guides the Petitioner on what to be contained in the petition but it does not give an automatic right to petitioner to challenge an award where no award is filed. Mr. Komba submitted further that, the time limit for filing an arbitral award in court is six months as clearly provides under item 18 of First Schedule of the Law of Limitation Act Cap.89 R.E 2002. Therefore, according to Mr. Komba, an arbitral award having being filed in Court by an Arbitrator and the Court accordingly notified parties to that arbitration, the aggrieved party may petition to object its filing and set aside the award within 60 days from the date of notification of the filing the award in Court. Mr. Komba supported his Page 8 of 13 arguments by preferring this Court to the case of TANZANIA COTTON MARKETING BOARD VERSUS COGECOT COTTON COMPANY S.A, Civil Appeal No.60 of 1998. Mr. Komba submitted further that, the decision in Misc. Civil Cause No. 134 of 2006 EAST AFRICAN DEV. BANK VERSUS BLUE LINE ENTERPRISES LTD (supra) cited by Mr. Kilindu to buttress his argument that the time to file a petition to set aside an award starts to run from the day the Award is collected can no longer stand in view of the ruling by the Court of appeal of Tanzania that the time starts to run when the parties acknowledge receiving notice of filing of the award in Court. Mr. Komba added that it is established precedent in Misc. Civil Cause No.134 of 2006, EAST AFRICAN DEV. BANK VERSUS BLUE LINE ENTERPRISES LTD that, "the High Court and all Courts subordinate to it, are bound by all the decisions o f the Court o f Appeal." Mr. Komba submitted further that, the argument by Mr. Kilindu that, the decision in Misc. Civil Cause No.35 of 1992, TANZANIA HARBOURS AUTHORITY AND MVITA CONSTRUCTION CO. LTD was held per incurium, that is, an afterthought as Rule 8 of the Arbitration Rules guides the Applicant on what the petition should contain where there is an award filed in Court, which an aggrieved party wants to challenge the same. On the submissions by the learned Counsels, no doubt is left in mind that the purported Final Arbitral Award granted by the Stockholm Chamber of Commerce in favour of the Respondent has never been filed in this Court as per the requirement of the law. The steps to be taken by either Page 9 of 13 party to challenge an arbitral award is clearly stipulated under section 12 of the Arbitration Act Cap. 15 R.E 2002, Rule 4 of the Arbitration Rules [GN 427 of 1957] and Rule 20(1) to the Second Schedule of the Civil Procedure Code, [Cap.33 R.E 2002 respectively. I shall for purposes of this matter quote in full the provisions of section 12 of the Arbitration Act which provides as follows: "(2) The arbitrators or umpire shall, a t the request o f any party to the submission or any person claiming under him and upon payment o f the fees and charges due in respect o f the arbitration and award and o f the costs and charges o f filing the award, cause the award or a signed copy o f it, to be filed in the court; and notice o f the filing shall be given to the parties by the arbitrators or umpire;" (the emphasis is o f this Court) The above provision of the law which is counched in mandatory terms is a jurisdiction conferment. It mandatorily directs how the court should be moved. This is followed by Rule 4 of the Arbitration Rules which stipulates that: "Arbitrators or an umpire, requested under the provisions o f section 11(2) o f the A ct to cause an award to be filed in the Court, shall forward the award, or a copy certified by them or him to be a true copy, together with the evidence on the reference, the minutes o f their proceedings and a copy o f each notice given to the parties, by Page 10 of 13 registered post and in a sealed envelope addressed to the Registrar together with a letter, also so addressed, requesting that such award or copy be filed in the Court; (the emphasis is o f this Court). The above provision directs where the Award should be forwarded, the mode and the contents of the documents to be filed in the Court. It is also couched in mandatory terms. The requirement to file an award referred to arbitration without the intervention of the court also finds expression in Rule 20(1) of the Second Schedule of the Civil Procedure Code, [Cap.33 R.E 2002] which provides that: "Where any matter has been referred to arbitration without the intervention o f a Court and an award has been made thereon, any person interested in the award that the award be filed in Court". The above outlined mandatory procedural steps find judicial expression in a number of Court decisions including Miscellaneous Civil Cause No.35 of 1992 between TANZANIA HARBOURS AUTHORITY VERSUS MVITA CONSTRUCTION CO. LTD (Unreported), Miscellaneous Civil Cause No.4 of 2011 between SHELL TANZANIA LIMITED VERSUS SUPERSTAR FORWARDERS COMPANY LIMITED (unreported) (the decisions by the H.C-Commercial Division) and in Miscellaneous Civil Cause N o .ll of 2010 between the HON. ATTORNEY GENERAL VERSUS HERMANUS PHILIPPINUS STEYN Page 11 of 13 (unreported) (the decision of the H.C-Commercial Division), to mention just a few. The decision of this Court in Miscellaneous Civil Cause N o .ll of 2010 between the HON. ATTORNEY GENERAL VERSUS HERMANUS PHILIPPINUS STEYN, amply explains in full the mandatory procedural steps to be followed by either party minded to challenge an arbitral award already filed in court. The Petitioner in the present petition has not complied with those steps. Given that the Final Arbitral Award has not yet been presented and filed in this Court by an Arbitrator as required by law, the petition in my view has been improperly filed in this Court. In fine and for the foregoing reasons, I shall allow the first ground of preliminary objection, which disposes of the matter. As such I do not have to traverse the second ground of objection. The petion is hereby struck out with costs. Order accordingly. ______ — R.V. MAKARAMBA JUDGE 07/09/2012 Page 12 of 13 Ruling delivered this 07th day of September 2012 in the presence of Mr. Kitundu G. Advocate for the Petitioner and Mr. Komba, Advocate for the Respondent. R.V. MAKARAMBA JUDGE 07/09/2012 Words count: 2,766 Page 13 of 13